January 7, 2010

New claims for US jobless benefits edged up by 1,000 in the past week to 434,000 while other claims data showed modest improvement in the troubled labor market, official figures showed Thursday.
The seasonally adjusted initial claims for unemployment insurance benefits in the week ending January 2 rose slightly from the prior week, when it had hit the lowest level in over a year.

I have a question. Economists generally consider 425,000 to be a break-even point for this number. While people get laid off, new people get hired in our vast economy and the general rule of thumb is that when it hits 425,000 it is break-even and the economy is not losing or gaining jobs.

BUT what if 425,000 people aren't being hired, because the economy is bad? I have not seen discussion of how this affects things. Doesn't that change this rule of thumb?